In a traditional payment transaction scenario, a user uses a payment device at an access device to pay for a product or service. The payment device information is sent to a payment processing network, which communicates with an issuer of the payment device to authorize the transaction. The issuer merely checks if the user has enough balance/credit left in the account to cover the amount of transaction.
Thus, in the conventional method there is no validation of the transaction itself. For example, the issuer cannot request additional documentation from either the merchant or the user to verify whether the service/product that is subject of the transaction is actually required and/or provided to the user. In other words, nothing is done to check whether the transaction is genuine, proper, or actually initiated by the payment device holder. In the conventional system, if the user has enough balance/credit in his account and the required transaction details are provided by the merchant, the transaction is processed without additional verification. The problem is especially acute when there are more than two entities involved in a transaction where the entity paying for the product/service is not the entity that actually receives the product/service.
Currently, the existing payment processing systems are not equipped to handle the extra traffic that may be generated by the information/documentation related to each payment transaction that involves multiple entities. Thus, there is a need for a new infrastructure that can handle the increased traffic generated because of the extra validation processes and thereafter process payment once the transaction is validated.